4 ms·

This sounds pretty technical but I think I can follow. If you let people out of their houses to buy stuff, after they couldn't for a year, then the economy is g

by anm89 6y ago

This sounds pretty technical but I think I can follow. If you let people out of their houses to buy stuff, after they couldn't for a year, then the economy is going to show growth in the quarter you let them out. They've solved all of economics! Just suppress growth intentionally for a while so then when you stop suppressing you'll get a couple great quarters! Its the economics equivalent of a perpetual motion machine

alpineidyll3 6y ago
Agreed. This is the type of low information popular press I visit HN to avoid...
shostack 6y ago
I'm personally curious to see how much investment goes to the restaurant industry. Despite the sad circumstances that led to lots of real estate becoming available, it will mean fresh opportunity for a new wave of retail and dining. I suspect the types of businesses opening will be ones that are inherently better adapted to lockdowns and lack of indoor dining in case things surge again.
imtringued 6y ago
What you described is just the broken window fallacy. The only reason it works is because people stop arguing whether to fix the window or not. They just fix it. It's purely a psychological effect and that is why it will not work twice. However, the second order effects are real and they do help the economy over the long run even if the original reason is flawed.
- anm89 6y ago
  What I'm describing is an accounting trick. If you take an average, then make it smaller, then compare it back to the original average, there will be a difference. Not clear how you are connecting this to the broken window theory, which as a side note, while often used fallaciously is not a fallacy in itself.
PicassoCTs 6y ago
What if people are contempt? What if the found out that games, bread and netflix, are enough to be happy. That all you need in addition is the company of other people and not a festival of useless consumption? What if today is the new maximum?
- choeger 6y ago
  Then the economy will grow by providing more and better games, bread, and Netflix. You cannot stop economic growth (except violently) as long as you don't put a stop to humans learning stuff.
  - jean_tta 6y ago
    There are plenty of countries that had no or low growth without any violence. Also if the economy can grow by providing more and better games, bread, and Netflix, why didn't it happen during the various lockdowns in various countries?
    - KptMarchewa 6y ago
      They have corruption, which is kind of violence.
      - jean_tta 6y ago
        If anything that lowers growth is a kind of violence, then it is tautological to say that you cannot lower growth without violence.
jean_tta 6y ago
I would call this "obvious in retrospect". Of course you can tell a little story on why it is obvious, but you can also tell a little story on why the opposite is obvious. The tricky part is figuring out which "obvious" thing will happen and which "obvious" think won't. If there was no growth and bleak predictions of future growth, it would have been just as easy to rationalize. > This sounds pretty technical but I think I can follow. If you put people out of jobs and out of their homes for 1+ year, they ain't going to come back to an utopian pre-pandemic world. What did you think, that all the lost human capital & institutional knowledge lost in destroyed jobs and bankrupt companies was going to be rebuild in a day? If there was no growth and positive predictions of future growth, it would have been just as easy to rationalize. > This sounds pretty technical but I think I can follow. It takes a little while for people and companies to adjust to the post-pandemic world - takes a while to ramp up production, takes a while to stop saving just in case and start spending again. If you let people out of their houses to buy stuff, might take a couple months to transition back to normal but it will happen eventually. If there was high growth in the short and bleak predictions of future growth, it would have been just as easy to rationalize. > This sounds pretty technical but I think I can follow. If you let people out of their houses to buy stuff, after they couldn't for a year, then the economy is going to show growth in the quarter you let them out. But after that quarter, not much will happen. Long term growth depends on HN engineers developing revolutionary new software and the pandemic hasn't changed that. Opening up will allow us to catch up but won't have sustained effect. And so forth.
tstrimple 6y ago
This is almost the meta-plot from most of the Dune series.

by anm89 6y ago

alpineidyll3 6y ago

Agreed. This is the type of low information popular press I visit HN to avoid...

shostack 6y ago

I'm personally curious to see how much investment goes to the restaurant industry. Despite the sad circumstances that led to lots of real estate becoming available, it will mean fresh opportunity for a new wave of retail and dining. I suspect the types of businesses opening will be ones that are inherently better adapted to lockdowns and lack of indoor dining in case things surge again.

imtringued 6y ago

What you described is just the broken window fallacy. The only reason it works is because people stop arguing whether to fix the window or not. They just fix it. It's purely a psychological effect and that is why it will not work twice. However, the second order effects are real and they do help the economy over the long run even if the original reason is flawed.

anm89 6y ago
What I'm describing is an accounting trick. If you take an average, then make it smaller, then compare it back to the original average, there will be a difference. Not clear how you are connecting this to the broken window theory, which as a side note, while often used fallaciously is not a fallacy in itself.

PicassoCTs 6y ago

What if people are contempt? What if the found out that games, bread and netflix, are enough to be happy. That all you need in addition is the company of other people and not a festival of useless consumption? What if today is the new maximum?

choeger 6y ago
Then the economy will grow by providing more and better games, bread, and Netflix. You cannot stop economic growth (except violently) as long as you don't put a stop to humans learning stuff.
- jean_tta 6y ago
  There are plenty of countries that had no or low growth without any violence. Also if the economy can grow by providing more and better games, bread, and Netflix, why didn't it happen during the various lockdowns in various countries?
  - KptMarchewa 6y ago
    They have corruption, which is kind of violence.
    - jean_tta 6y ago
      If anything that lowers growth is a kind of violence, then it is tautological to say that you cannot lower growth without violence.

jean_tta 6y ago

I would call this "obvious in retrospect". Of course you can tell a little story on why it is obvious, but you can also tell a little story on why the opposite is obvious. The tricky part is figuring out which "obvious" thing will happen and which "obvious" think won't. If there was no growth and bleak predictions of future growth, it would have been just as easy to rationalize. > This sounds pretty technical but I think I can follow. If you put people out of jobs and out of their homes for 1+ year, they ain't going to come back to an utopian pre-pandemic world. What did you think, that all the lost human capital & institutional knowledge lost in destroyed jobs and bankrupt companies was going to be rebuild in a day? If there was no growth and positive predictions of future growth, it would have been just as easy to rationalize. > This sounds pretty technical but I think I can follow. It takes a little while for people and companies to adjust to the post-pandemic world - takes a while to ramp up production, takes a while to stop saving just in case and start spending again. If you let people out of their houses to buy stuff, might take a couple months to transition back to normal but it will happen eventually. If there was high growth in the short and bleak predictions of future growth, it would have been just as easy to rationalize. > This sounds pretty technical but I think I can follow. If you let people out of their houses to buy stuff, after they couldn't for a year, then the economy is going to show growth in the quarter you let them out. But after that quarter, not much will happen. Long term growth depends on HN engineers developing revolutionary new software and the pandemic hasn't changed that. Opening up will allow us to catch up but won't have sustained effect. And so forth.

tstrimple 6y ago

This is almost the meta-plot from most of the Dune series.